Talboe Company makes wheels which it uses in the production of children's wagons. Talboe's costs to produce 220,000 wheels annually are as follows: Direct material Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total $44,000 66,000 33,000 72,000 $215,000 An outside supplier has offered to sell Talboe similar wheels for $0.80 per wheel. If the wheels are purchased from the outside supplier, $27,000 of annual fixed manufacturing overhead would be avoided and the facilities now being used to make the wheels would be rented to another company for $65,400 per year. What is the highest price that Talboe could pay the outside supplier for each wheel and still be economically indifferent between making or buying the wheels? (Round your answer to 2 decimal places.)
Q: Firm M exchanged an old asset with a $11, 500 tax basis and a $29, 000 FMV for a new asset worth $…
A: A taxable exchange is one in which the gain or loss is taxed or deductible. A nontaxable exchange is…
Q: The difference between cash receipts and cash disbursements for December would be: Multiple Choice…
A: The budget is prepared to estimate the requirements for the period. The cash receipts schedule is…
Q: Skysong, Inc., organized in 2022, has the following transactions related to intangible assets.…
A: Intangible assets, as the name suggest are assets which cannot be seen, felt or touched. Basically…
Q: Nissley Wedding Fantasy Corporation makes very elaborate wedding cakes to order. The owner of the…
A: ACTIVITY BASED COSTINGActivity Based Costing is a Powerful tool for measuring…
Q: The trial balance of Dunn Service Center, Inc., on March 1, 2018, lists the entity’s assets,…
A: Journal Entry is the primary step in recording the transactions in the books of accounts.The…
Q: c. Woolard is concerned about future limitations on Its $179 expense. How much $179 expense should…
A: Depreciation in accounting refers to the systematic allocation of the cost of an asset over its…
Q: (d) Sum-of-the-years'-digits method for 2027 (e) Double-declining-balance method for 2026 tA $ $ LA
A: The Sum-of-the-Years-Digits method allocates depreciation by considering the sum of the years of an…
Q: Marigold Inc., issues 500 shares of $10 par value common stock and 100 shares of $100 par value…
A: A journal entry is a basic accounting record that is used to chronologically track financial…
Q: Required information [The following information applies to the questions displayed below.] Dahlia is…
A: Capital gain is the increase in the value of asset and is realized when it is sold.The minimization…
Q: The office furniture was acquired on September 1, 2023, and has an estimated four-year life. The…
A: In this question, we need to compute the depreciation expense of Furniture as of Sept 30,2023. The…
Q: 33) Lennon Company signed a 12-month, $59,000, 8% note on June 1, 2023. The amount of interest to be…
A: Interest on Note is calculated by multiplying the stated rate of interest with the face value of the…
Q: Use the following information for Taco Swell, Incorporated, (assume the tax rate is 21 percent):…
A: The Basic accounting equation isTotal Assets = Total liabilities + Stockholders…
Q: the answer is still wrong please redo calculate to come with the right answer
A: In this question, we need to compute the Estimated raw material inventory balance at the end of July…
Q: Kelly started a business with £96,000 equity invested. During the year, she withdrew £15,000 in cash…
A: The objective of the question is to calculate the profit or loss for the year based on the equity…
Q: The Stockholders' Equity accounts of ExxonMobil on December 31, 2022 were as follows: Preferred…
A: Unlike regular shareholders, preference shareholders have either no voting rights or very little…
Q: Sohr Corporation processes sugar beets that it purchases from farmers. Sugar beets are processed in…
A: Lets understand the basics.When more than one product gets produced from a single process then all…
Q: Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold…
A: The variance is the difference between the standard and actual cost production data. The revenue and…
Q: Bridgeport Inc., a private company that applies ASPE, incurred $15,900 in materials and $11,600 in…
A: Account titles and explanationDebitCreditResearch and Development…
Q: TB MC Qu. 08-32 This exhibit provides an example... This exhibit provides an example of a…
A: Profitability is the measure of an organization's capacity to generate a profit relative to its…
Q: Current Attempt in Progress Gary & Company uses a perpetual inventory system. The following…
A: In case of FIFO method, the first purchased goods and beginning inventory will be sold first and…
Q: 3. The jackets require two direct materials: silk fabric and viscose fabric for lining. Silk Silk…
A: The company's spending plan, or budget, is determined by its revenue and costs.It makes projections…
Q: Tilson Corporation has projected sales and production in units for the second quarter of the coming…
A: The cash budget accounts for a range of cash inflows, including debt repayment, capital…
Q: On November 18 of year 1, Javier purchased a building, including the land it was on, to assemble his…
A: Note: As per our guidelines, only the first three subparts shall be answered.A convention of federal…
Q: The standard price for direct materials is used in the calculation of which variances ? Neither the…
A: The objective of the question is to understand which variances in cost accounting use the standard…
Q: Barbara Strand's regular hourly wage rate is $34, and she receives an hourly rate of $51 for work in…
A: The Gross earnings = (40 hours x rate per hour) + (hours in excess of 40 hours x rate per hour )=…
Q: Determine the labor cost variance under the following methods A. Two-Way Variance Analysis
A: The labor cost variance is the difference between the standard direct wages specified for the…
Q: In 2021, Montana Corp. entered into a contract to begin work on a two-year project. Montana…
A: The financial indicator used to assess a business operation's gross profitability is gross profit.…
Q: Mary and Scott formed a partnership that maintains its records on a calendar-year basis. The balance…
A: It is an agreement between two or more parties to conduct the business and share the profits and…
Q: Doede Corporation uses activity-based costing to compute product margins. In the first stage, the…
A: Under activity-based costing method, the cost is allocated to each activity based on its…
Q: a not for profit entity provides the following information for the year 2023. Unrestricted pledges…
A: A not-for-profit organization is an enterprise established with a service motive. The main purpose…
Q: Date 1-Nov 4-Nov 15-Nov 17-Nov 28-Nov 30-Nov Description Beg. Inventory Purchased Sold Purchased…
A: Lets understand the basics.Cost of goods sold and inventory can be calculated using,(1) FIFO(2)…
Q: Assuming Brandon's marginal ordinary income tax rate is 32 percent, what effect do the gains and…
A: The sale of §1231 assets involves disposing of depreciable business assets, such as machinery or…
Q: Oriole Department Store determines it will cost $108,000 to restore the area (considered a land…
A: Journal entries serve as the foundation of financial statements. They help you wit ledger posing and…
Q: Depreciation by Two Methods A Caterpillar tractor acquired on January 12 at a cost of $306,000 has…
A: Depreciation expense :— It is the allocation of depreciable cost of asset over the estimated useful…
Q: Delta Company produces a single product. The cost of producing and selling a single unit of this…
A: The objective of the question is to determine the financial advantage or disadvantage of accepting a…
Q: elected sales and operating data for three divisions of different structural engineering firms are…
A: Margin = Net operating income / SalesTurnover = Sales / Average operating assetsReturn on…
Q: Mountain High Ice Cream Company transferred $61,000 of accounts receivable to the Prudential Bank.…
A: Journal Entry is the primary step in recording the transactions in the books of accounts.The…
Q: Blue Company purchased equipment for $301,000 on October 1, 2025. It is estimated that the equipment…
A: Lets understand the basics.In straight line basis depreciation is calculated in equal installment…
Q: Gotham University offers only high-tech graduate-level programs. Gotham has two principal operating…
A: Cost allocation is a process of allocating supporting departments' cost to the operating…
Q: Exercise 12-7A (Algo) Job-order costing in a service company LO 12-2 Jordan Condos Corporation is a…
A: Income earned from condo 2 = Revenue received from condo 2 - Total cost of condo 2Total cost of…
Q: Mustang Corporation had 100,000 shares of $2 par value common stock outstanding. On December 31,…
A: Journal Entry :— It is an act of recording transactions in books of account when transaction…
Q: products and the company's costs and activity-based costing system appear below: Activity Cost Pools…
A: Activity Rate :— It is the rate used to allocate manufacturing overhead cost to cost object under…
Q: Scott filed his 2022 California tax return and paid his balance due of $125 on November 30, 2023.…
A: A late filing penalty is a financial penalty imposed by tax authorities on individuals or businesses…
Q: O Determine Cost of Land Four Corners Delivery Company acquired an adjacent lot to construct a new…
A: LANDLand is non-depreciable asset of the organization. A company purchases development building for…
Q: On June 1, 2023, JetCom Inventors Inc. issued a $540,000, 12%, three-year bond. Interest is to be…
A: The bonds are the debt instruments that are issued by the government or corporations to raise money…
Q: Prepare a summary of the effects of the TCJA on the following entity types: S Corp, C Corp, LLC, and…
A: The objective of this question is to understand the impact of the Tax Cuts and Jobs Act (TCJA) on…
Q: ormation applies to the questions displayed below.] Select the correct answer for each of the…
A: A business or entity that suffers a decline in the value of its assets or accrues additional costs…
Q: Mahalo Boat Adventure Inc. has a July 31 year-end. It showed the following partial amortization…
A: “Since you have posted a question with multiple sub-parts, we will provide the solution only to the…
Q: Smithson Mining operates a silver mine in Nevada. Acquisition, exploration, and development costs…
A: Initial cost :The term "initial cost" refers to the financial resources necessary for the…
Q: On December 31, 2024, Novak Inc. borrowed $4,500,000 at 12% payable annually to finance the…
A: Capitalized costs are costs that are incurred to increase the efficiency and effectiveness of the…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Box Springs. Inc., makes two sizes of box springs: queen and king. The direct material for the queen is $35 per unit and $55 is used in direct labor, while the direct material for the king is $55 per unit, and the labor cost is $70 per unit. Box Springs estimates it will make 4,300 queens and 3,000 kings in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: How much does each unit cost to manufacture?Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin is $25 per unit and $40 s used in direct labor, while the direct material for the double is $40 per unit, and the labor cost is $50 per unit. Box Springs estimates it will make 5,000 twins and 9,000 doubles in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: How much does each unit cost to manufacture?Rolertyme Company manufactures roller skates. With the exception of the rollers, all parts of the skates are produced internally. Neeta Booth, president of Rolertyme, has decided to make the rollers instead of buying them from external suppliers. The company needs 100,000 sets per year (currently it pays 1.90 per set of rollers). The rollers can be produced using an available area within the plant. However, equipment for production of the rollers would need to be leased (30,000 per year lease payment). Additionally, it would cost 0.50 per machine hour for power, oil, and other operating expenses. The equipment will provide 60,000 machine hours per year. Direct material costs will average 0.75 per set, and direct labor will average 0.25 per set. Since only one type of roller would be produced, no additional demands would be made on the setup activity. Other overhead activities (besides machining and setups), however, would be affected. The companys cost management system provides the following information about the current status of the overhead activities that would be affected. (The supply and demand figures do not include the effect of roller production on these activities.) The lumpy quantity indicates how much capacity must be purchased should any expansion of activity supply be needed. The purchase price is the cost of acquiring the capacity represented by the lumpy quantity. This price also represents the cost of current spending on existing activity supply (for each block of activity). Production of rollers would place the following demands on the overhead activities: Producing the rollers also means that the purchase of outside rollers will cease. Thus, purchase orders associated with the outside acquisition of rollers will drop by 5,000. Similarly, the moves for the handling of incoming orders will decrease by 200. The company has not inspected the rollers purchased from outside suppliers. Required: 1. Classify all resources associated with the production of rollers as flexible resources and committed resources. Label each committed resource as a short- or long-term commitment. How should we describe the cost behavior of these short- and long-term resource commitments? Explain. 2. Calculate the total annual resource spending (for all activities except for setups) that the company will incur after production of the rollers begins. Break this cost into fixed and variable activity costs. In calculating these figures, assume that the company will spend no more than necessary. What is the effect on resource spending caused by production of the rollers? 3. Refer to Requirement 2. For each activity, break down the cost of activity supplied into the cost of activity output and the cost of unused activity.
- Roper Furniture manufactures office furniture and tracks cost data across their process. The following are some of the costs that they incur. Classify these costs as fixed or variable costs, and as product costs or period costs. Wood used to produce desks ($125,00 per desk) Production labor used to produce desks ($15 per hour) Production supervisor salary ($45,000 per year) Depreciation on factory equipment ($60,000 per year) Selling and administrative expenses ($45,000 per year) Rent on corporate office ($44,000 per year) Nails, glue, and other materials required to produce desks (varies per desk) Utilities expenses for production facility Sales staff commission (5% of gross sales)Hawkins Manufacturing Company produces connecting rods for 4- and 6-cylindcr automobile engines using the same production line. The cost required to set up the production line to produce the 4-cylinder connecting rods is 2,000, and the cost required to set up the production line for the 6-cylinder connecting rods is 3,500. Manufacturing costs are 15 for each 4-cylinder connecting rod and 18 for each 6-cylinder connecting rod. There is no production on weekends, so on Friday the line is disassembled and cleaned. On Monday, the line must be set up to run whichever product will be produced that week. Once the line has been set up, the weekly production capacities are 6,000 6-cylinder connecting rods and 8,000 4-cylinder connecting rods. Let x4 = the number of 4-cylinder connecting rods produced next week x6 = the number of 6-cylinder connecting rods produced next week s4 = 1 if the production line is set up to produce the 4-cylinder connecting rods; 0 if otherwise s6 = 1 if the production line is set up to produce the 6-cylinder connecting rods; 0 if otherwise a. Using the decision variables x4 and s4, write a constraint that sets next weeks maximum production of the 4-cylinder connecting rods to either 0 or 8,000 units. b. Using the decision variables x6 and s6, write a constraint that sets next weeks maximum production of the 6-cylinder connecting rods to either 0 or 6,000 units. c. Write a constraint that requires that production be set up for exactly one of the two rods. d. Write the cost function to be minimized.Brees, Inc., a manufacturer of golf carts, has just received an offer from a supplier to provide 2,600 units of a component used in its main product. The component is a track assembly that is currently produced internally. The supplier has offered to sell the track assembly for 66 per unit. Brees is currently using a traditional, unit-based costing system that assigns overhead to jobs on the basis of direct labor hours. The estimated traditional full cost of producing the track assembly is as follows: Prior to making a decision, the companys CEO commissioned a special study to see whether there would be any decrease in the fixed overhead costs. The results of the study revealed the following: 3 setups1,160 each (The setups would be avoided, and total spending could be reduced by 1,160 per setup.) One half-time inspector is needed. The company already uses part-time inspectors hired through a temporary employment agency. The yearly cost of the part-time inspectors for the track assembly operation is 12,300 and could be totally avoided if the part were purchased. Engineering work: 470 hours, 45/hour. (Although the work decreases by 470 hours, the engineer assigned to the track assembly line also spends time on other products, and there would be no reduction in his salary.) 75 fewer material moves at 30 per move. Required: 1. Ignore the special study, and determine whether the track assembly should be produced internally or purchased from the supplier. 2. Now, using the special study data, repeat the analysis. 3. Discuss the qualitative factors that would affect the decision, including strategic implications. 4. After reviewing the special study, the controller made the following remark: This study ignores the additional activity demands that purchasing would cause. For example, although the demand for inspecting the part on the production floor decreases, we may need to inspect the incoming parts in the receiving area. Will we actually save any inspection costs? Is the controller right?
- Remarkable Enterprises requires four units of part A for every unit of Al that it produces. Currently, part A is made by Remarkable, with these per-unit costs in a month when 4,000 units were produced: Variable manufacturing overhead is applied at $1.60 per unit. The other $0.50 of overhead consists of allocated fixed costs. Remarkable will need 8,000 units of part A for the next years production. Altoona Corporation has offered to supply 8,000 units of part A at a price of $8.00 per unit. If Remarkable accepts the offer, all of the variable costs and $2,000 of the fixed costs will be avoided. Should Remarkable accept the offer from Altoona Corporation?The following product Costs are available for Haworth Company on the production of chairs: direct materials, $15,500; direct labor, $22.000; manufacturing overhead, $16.500; selling expenses, $6,900; and administrative expenses, $15,200. What are the prime costs? What are the conversion costs? What is the total product cost? What is the total period cost? If 7,750 equivalent units are produced, what is the equivalent material cost per unit? If 22,000 equivalent units are produced, what is the equivalent conversion cost per unit?Otero Fibers, Inc., specializes in the manufacture of synthetic fibers that the company uses in many products such as blankets, coats, and uniforms for police and firefighters. Otero has been in business since 1985 and has been profitable every year since 1993. The company uses a standard cost system and applies overhead on the basis of direct labor hours. Otero has recently received a request to bid on the manufacture of 800,000 blankets scheduled for delivery to several military bases. The bid must be stated at full cost per unit plus a return on full cost of no more than 10 percent after income taxes. Full cost has been defined as including all variable costs of manufacturing the product, a reasonable amount of fixed overhead, and reasonable incremental administrative costs associated with the manufacture and sale of the product. The contractor has indicated that bids in excess of 30 per blanket are not likely to be considered. In order to prepare the bid for the 800,000 blankets, Andrea Lightner, cost accountant, has gathered the following information about the costs associated with the production of the blankets. Direct machine costs consist of items such as special lubricants, replacement of needles used in stitching, and maintenance costs. These costs are not included in the normal overhead rates. Otero recently developed a new blanket fiber at a cost of 750,000. In an effort to recover this cost, Otero has instituted a policy of adding a 0.50 fee to the cost of each blanket using the new fiber. To date, the company has recovered 125,000. Lightner knows that this fee does not fit within the definition of full cost, as it is not a cost of manufacturing the product. Required: 1. Calculate the minimum price per blanket that Otero Fibers could bid without reducing the companys operating income. 2. Using the full-cost criteria and the maximum allowable return specified, calculate Otero Fibers bid price per blanket. 3. Without prejudice to your answer to Requirement 2, assume that the price per blanket that Otero Fibers calculated using the cost-plus criteria specified is greater than the maximum bid of 30 per blanket allowed. Discuss the factors that Otero Fibers should consider before deciding whether or not to submit a bid at the maximum acceptable price of 30 per blanket. (CMA adapted)
- Carltons Kitchens makes two types of pasta makers: Strands and Shapes. The company expects to manufacture 70,000 units of Strands, which has a per-unit direct material cost of $10 and a per-unit direct labor cost of $60. It also expects to manufacture 30.000 units of Shapes, which has a per-unit material cost of $15 and a per-unit direct labor cost of $40. It is estimated that Strands will use 140,000 machine hours and Shapes will require 60,000 machine hours. Historically, the company has used the traditional allocation method and applied overhead at a rate of $21 per machine hour. It was determined that there were three cost pools, and the overhead for each cost pool is shown: The cost driver for each cost pool and its expected activity is shown: A. What is the per-unit cost for each product under the traditional allocation method? B. What is the per-unit cost for each product under ABC costing?Classify Costs Following is a list of various costs incurred in producing replacement automobile parts. With respect to the production and sale of these auto parts, classify each cost as either variable, fixed, or mixed. 1. Oil used in manufacturing equipment 2. Plastic 3. Property taxes, 165,000 per year on factory building and equipment 4. Salary of plant manager 5. Cost of labor for hourly workers 6. Packaging 7. Factory cleaning costs, 6,000 per month 8. Metal 9. Rent on warehouse, 10,000 per month plus 25 per square foot of storage used 10. Property insurance premiums, 3,600 per month plus 0.01 for each dollar of property over 1,200,000 11. Straight-line depreciation on the production equipment 12. Hourly wages of machine operators 13. Electricity costs, 0.20 per kilowatt-hour 14. Computer chip (purchased from a vendor) 15. Pension cost, 1.00 per employee hour on the jobRegal Executive, Inc., produces executive motor coaches and currently manufactures the cent awnings that accompany them at these costs: The company received an offer from Saied Tents to produce the awnings for $3,200 per unit and supply 1,000 awnings for the coming years estimated production. If the company accepts this offer and shuts down production of this part of the business, production workers and supervisors will be reassigned to other areas. Assume that for the short-term decision-making process demonstrated in this problem, the companys total labor costs (direct labor and supervisor salaries) will remain the same if the bar inserts are purchased. The specialized equipment cannot be used and has no market value. However, the space occupied by the awning production can be used by a different production group that will lease it for $60,000 per year. Should the company make or buy the awnings?